DERBY — The Valley Indy spent Tuesday and Wednesday reporting on a recently-revealed issue with the school budget. Click here to read the story.
The Valley Indy sent Derby Public Schools Superintendent Matthew Conway several questions related to the story. His answers are below.
Click here for the main story on the issue, which involves the fact the school budget did not budget for about $800,000 in salary increases approved last year.
From Conway:
Thank you for reaching out and for giving me the opportunity to provide some context.
As part of our ongoing review and reconciliation of the 2026-27 budget, our Business Office identified a variance between the salary amounts budgeted and our current projected salary obligations. The review determined that a formula used in the salary projection process did not fully capture the contractual salary increases for the current year. Once the issue was identified, we immediately began reviewing the budget and taking the necessary steps to address the variance.
There is important context regarding how this year’s budget was developed. At the time we developed the 2026-27 budget, we did not know what, if any, additional ECS or grant funding Derby would ultimately receive. Because of that uncertainty, we prepared multiple budget scenarios — from receiving no additional funding, to approximately 3% additional funding, and up to approximately 6%. Each scenario included reductions that could be made depending upon the final level of state and grant funding.
Had the salary calculation been correct from the outset, the reductions necessary to account for that amount would have been addressed as part of that budget process while we waited for final ECS and grant funding to be announced. Importantly, some of the operating reductions we are making now were already reflected in those original scenarios.
To answer your questions:
1. What’s your reaction to this shortfall?
Any budget variance of this size is concerning, and I take it very seriously. Our responsibility is to identify the issue, understand what caused it, correct it and manage the current year’s budget responsibly.
What is important in this situation is that we had already prepared for significant uncertainty in our funding. We developed multiple scenarios and identified potential reductions in advance. Some of the reductions we are implementing now were part of those original budget scenarios.
We also identified the salary variance early enough in the fiscal year that we have time to make thoughtful adjustments rather than waiting until later in the year when our options would be much more limited.
2. What cost-saving actions are in place to deal with the shortfall?
We are conducting a line-by-line review of the budget, limiting discretionary spending where appropriate, closely monitoring vacancies and staffing costs, and reviewing the reductions and efficiencies that were identified during our original budget development process.
We are also reviewing all available grant resources to determine whether existing expenditures can appropriately be supported through those funds. Any expenditure moved to a grant must meet the requirements and allowable uses of that particular grant.
Our goal is to address the variance through a combination of responsible expenditure reductions, operational efficiencies and appropriate use of available funding while protecting the programs and services that directly support students.
3. What potential impact could this have on student learning in the school district?
Protecting classroom instruction and the programs and services that directly support students remains our priority.
Because we had already developed different budget scenarios and identified potential reductions, we are not starting this process from scratch. We have a roadmap that allows us to make deliberate decisions about where savings can be achieved.
We will continue looking first at discretionary expenditures, operational efficiencies, vacancies and appropriate grant funding. We will make every effort to minimize the impact on classroom instruction and student learning.
4. Anything you want the public to know about this specific situation that I’m not asking?
I think it is important for the public to understand both parts of this situation.
There was an issue with the salary projection formula, and we take that seriously. At the same time, Derby developed this year’s budget during a period of significant uncertainty regarding ECS and grant funding. We planned for multiple possible outcomes, from no additional funding through approximately 3% and 6% increases, and each of those scenarios included potential reductions.
Had the salary calculation been correct from the beginning, the necessary reductions would have been addressed during that same process, and we would have waited for the final ECS and grant allocations before determining which reductions ultimately needed to remain.
Some of the reductions we are making today were already identified in those original scenarios.
Most importantly, we identified the issue through our financial review, we are addressing it now, and we are being transparent about it. We have a responsibility both to our students and to Derby taxpayers to manage the resources entrusted to us carefully. We will continue monitoring the budget throughout the year and making the adjustments necessary to maintain fiscal responsibility while protecting the educational program for our students.